ambush makeovers. those mail order desserts we were talking about. have an awesome winesday, wednesday, everybody. -- captions by vitac -- www.vitac.com i'm jim cramer, and welcome to my world. you need to get in the game! firms are going to go out of business and he's nuts! they're nuts! they know nothing! >> i always like to say there's a bull market somewhere. "mad money." you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to save you a little money. my j is not just to entertain you but i'm trying to educate and teach tonight, so call me at 1-800-743-cnbc. with the dow jones average barely positive for the year, down ten of the last 12 days, a miserable period, with visions of previous spring swoons dancing in our heads. it might be worth it to take a moment to figure out which
stocks in the dow jones average could take us down further and whether it's reasonable to expect that they will. it's certainly worth pondering on still one more not so hot day, dow down 33, s&p lower, nasdaq declined .68%. what we fear, obviously, is the thousand-point bruising we got from the dow -- dow, 10,700. and the hideous may until october annihilation that 2011 brought us. the worries are justified. europe is in collapse mode led by the modern day runs at the bank by greeks. if that happens, spain and italy will not be far behind. although our industrial production numbers this morning were robust and our foreclosure applications are the lowest in four years, europe is reluctantly i say it, back in the driver's seat with nothing good that i can see happening, at least for now. so with that hideous backdrop,
i've got to ask who can do the most damage in the dow from here? what stocks would take the averages down another 10%? the big fear out here on top of the 700-odd points we've already fallen, who for the purposes of this analysis -- i'm going use this word repeatedly because i need you to focus on it -- vulnerable to a big decline? first would have to be the oils. exxon and chevron are down 3% and 6% respectively. while chevron at least gives you 3.6% yield, exxon's 2.7% yield doesn't mean jack. this group verges on freefall pretty much every day. i don't see it stopping any time soon because we seem to be replaying last year's decline. the good news, though, is that even through the lens of 2011, chevron only sold down to 90. it's 100 now. the bad news is that exxon hit $67. i think chevron could bang us until it yields 4%. still a little ways from now. but exxon, which reported a disappointing quarter, could decline 7% or 8% fairly easily. call exxon vulnerable.
a resource related portion of the dow. you can't help but wonder if caterpillar isn't going to be crushed from here. could it go down to 70 from last year? give the comments about the slowdown in commodity capital equipment spending, i'm saying that $70 is not off the table, and a move to 80 from its 91 and change perch is probably likely given the lack of dividend support. call caterpillar extremely vulnerable. the other industrials, they're on slightly firmer footing. united technology reported a pretty good quarter. they can be taken down given their less than 3% yields, but their businesses are diversified and strong. they have europe, yet also some secular positives. some vulnerability for certain, but not anything totally hideous. as for dupont, the company missed its protections last year, but has much more going for it right now, auto exposure, 15 million cars being built, all of which are going their way now. throw in that 3.5% yield and
dupont is not all that vulnerable to a severe selloff. general electric, 49% owner of this company got boosted just today thanks to a big dividend from its finance arm. that makes a nice bump-up more likely in the future. g.e. very minor vulnerability. not alcoa. it has taken drastic action to bring its cost down. i've got to wonder, though, despite their total commodity orientation, it doesn't get saved by aircraft, turbine and auto build. let's say it's somewhat vulnerable. the retailers are suddenly resilient. if they haven't hit walmart more off this mexican scandal, i don't see much vulnerability going forward. after going through home depot's conference call last night, i was shocked to see that stock went down as much yesterday at all. of course, it's snapping right back. by the way, both walmart and home depot seem inoculated
against europe by their largely domestic exposure. speaking of just reporting, disney put up monster good numbers. a new multi-billion-dollar brand. avengers didn't even exist 21 days ago. robust theme parks and ad rates, disney has to be one of the most -- least vulnerable stocks in the dow. it's getting a huge tail wind from lower gas prices. the recession the one from benefit from the commodity collapse. not only are they not vulnerable, they seem to be actually in a position to go up on european weakness, despite the strong dollar. procter & gamble, johnson & johnson, merck and pfizer all look like they are buys right now. perhaps they are invulnerable for now. you can follow along. in order to get ahead of kraft split into two companies, because both are huge winners. so is coca-cola where truck fuel, packaging, and grain costs are coming down because of the strong -- not all that vulnerable. not even positive.
tech could be worrisome, but i'm not particularly troubled. at least within the dow tech. right now, intel is coming out with a new line of chips. given that both had extremely strong quarters, i would be a buyer of either one of them as they go down. the verdict not vulnerable, possibly positive. as for cisco, hey, it's already been crushed. how about was vulnerable. hewlett packard is awful and can go lower. but with 22 bucks, the downside seems fathomable. another member was vulnerable, ibm presents a real risk. the dow is a silly, weighted index. on the other hand, the huge buyback is the actual earnings. i call it somewhat vulnerable. jp morgan feels like cisco to me. it's now much less vulnerable because of its big swoon. that swoon has crushed bank of america, too. still up 28% for the year, looks like a stock that's worth buying at seven bucks, and boy, they're really improving the balance
sheet by the day. charitable trust just sold american express, had a big gain. quarter was terrific, though. travelers also reported a fantastic quarter and has showed no degradation during the selloff. i call express vulnerable from 64 to 67. at&t and verizon, i know they've run gigantically, yet i don't know a soul who doesn't want in, given their totally domestic businesses with remarkable wireless growth. they are not particularly vulnerable. as a matter of fact, i want to buy at&t for my charitable trust down the point. verizon seems pretty good, which leaves two stocks that have fallen, but also have catalysts, which could halt the declines here, boeing and mcdonald's. i think boeing is going to show big share gains against air bus. mcdonald's is already down a lot. i think it's factoring in a real
slowdown in numbers that might not even happen. commodity costs are going down, down, down for them, and the dividends terrific. limited vulnerability to both. the venerable index, subject to a decline that could take it down to even or maybe slightly below for the year. seems better with very few stocks on the vulnerable list and many more on the hope they come down so i can buy them list, here's the bottom line. a decline in the dow of several percentage points wouldn't shock me from these levels, but a big collapse, that's harder for me to swallow without a total collapse in europe. unfortunately, that's not beyond the realm of possibility, so we have to stay vigilant and avoid the vulnerables no matter what. bill in illinois. bill? >> caller: yes, sir. >> what's up? >> caller: i have a question. gm stock, about a month ago or so, when it was at an all-time low, why didn't more people jump on board and what do you think that this interest that berkshire hathaway has shown is going to do? >> i think the berkshire hathaway effect was present today. not very levered to the resurgence of the japanese auto companies and they don't really
have their cost structure down. warren buffett is out there making a valuation bet. he can do that because he can wait forever. if i were to recommend gm right here, believe me, i think what you would say is oh, jeez what have you done for me lately? meaning nothing. josh in wisconsin. josh? >> caller: hey, big daddy, cramer, big trucker boo-yah to you. >> josh, man, thanks for calling in. what's up? >> caller: well, with everything unraveling again in europe with greece and all that, what do we do with the dollar going up and the euro going down? >> what we have to do is pick companies that are not that levered to the dollar or that have such great franchises that they can raise price to offset the dollar. i do believe the dollar is going to keep going higher. i think the currency is not as important as being able to raise price. the stocks that i like are able to raise price and do well in a slowing environment. pat in california. pat?
>> caller: hey, jim, how you doing? >> real good. how about you, pat? >> caller: i'm great. here's a big jim plunkett should be in the hall of fame boo-yah for you. >> yeah, definitely, boo-yah. jeez. >> caller: anyway, i want to talk to you by orashire. the company got fda approval yesterday. they test for more than hiv. they have great future in health applications, immigration, law enforcement, prisons, and corporate hr. do you have any thoughts? >> yeah. after arena, which was expecting to quadruple, i am reluctant to tell you not to buy orashire. it's a spec. buy half. a slide in the dow several percentage points would not shock me. we are not isolated. but the key is to find the companies which are vulnerable and which aren't and i just outlined the true vulnerabilities. "mad money" will be right back.
>> coming up, commodity conundrum. global growth concerns are crushing commodities. but could the collapse be your opportunity to cash in? cramer is going "off the charts" to find out. and later, social studies. the facebook notifications keep rolling in. but don't get overwhelmed. cramer's got you covered. with this giant size social offering still expanding, jim stacks up the shares against the rest of its social circle. could his comments help you change your status? all coming up on "mad money." miss out on some "mad money"? get your "mad money" text alert today. text mm to 26221 to get cramer right on your phone. for more info, visit madmoney.cnbc.com or give us a call at 1-800-743-cnbc. [ male announcer ] this is lois.
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it's delicious goodness, just the way nature intended it. lipton. drink positive. you know me. i like to be constructive. accentuate the positive, eliminate the negative, that sort of thing. you won't get very far in the stock market just by taking your cue from johnny mercer songs. even though i say buy into
weakness, sometimes it's just as important to lay out all the stocks you need to stay the heck away from. >> sell, sell, sell. >> that's why tonight we're doing a very special "off the charts" version of the sell block with the help of carolyn brodin. she runs fibonacciqueen.com we've got to show you how dangerous the commodities stocks can be in this environment, and they are dangerous. just because they've already been crushed by the commodity collapse doesn't mean, as we've learned before, they can't be crushed some more. i may not be a chart guy. i'm fundamentalist, meaning someone who doesn't put much stock in the charts and instead invests based on how the underlying fundamentals are doing. when the trend is not your friend, when it is your worst enemy, and no surprise, based on brodin's work, that's the case right now in the vast majority of all commodity-based stocks,
even some that i consider best of breed. there may be some areas they can bounce, but for now, brodin says the path of least resistance calls for lower prices. as you will see in a moment, these stocks are all pretty much tracking together as if they were one stock. the oil services titan is the best in the business. doesn't matter right now. nothing will save this one from the plummeting price of oil and the stock's hideous chart. schlumberger has everything they love to hate. it's been making a clear pattern of lower highs. and lower lows, which of course is a classic evidence of a true downturn. slob, as we call it on wall street, is now below its 50-day, and its 200 day moving average, kiss of death, because it has deteriorated on a short-term and long-term basis.
worst of all, from brodin's perspective on the first day of may, schlumberger tried and failed to break through a key reisistance level, and then went right back down. what makes that level so important? brodin is a disciple of a medieval mathematician that discovered a series of ratios that repeat endlessly in nature, well documented. turns out, they exist in the stock market, too. stocks will repeat a previous move. those are the key fibonacci ratios. i can't explain it. it happens often enough for numerous technicians to make money using a fibonacci based strategy, so i cannot regard it as being mumbo jumbo. it works too often. schlumberger was making a 61.8
retracement back to a crucial high made in february of last year. maybe it's self-fulfilling, but bingo, that's where you had to sell it. so now what happens? unless schlumberger can rapidly break out and bounce back from where it failed before, then brodin sees it sinking ever further. based on her fibonacci projection, she believes it could fall all the way to $47.72. you know what that is? that's a 26% decline from those levels. even though it's already been hammered and obliterated, brodin thinks it's a falling knife that could go much lower. this is the butcher block that you would be in if you played along. can't have you be a butcher block. you can see the same thing in another great company. this is the chart of apache. it's another very well-run company, among the strongest
explorers for oil and gas. the envy of the industry, people. apache is like a good house in an awful neighborhood. brodin's read on the chart is very bearish. just like slob, apache has made a pattern of lower highs, lower lows. you see that pattern? that is just a nightmare. again, it is below the 50-day and the 200 day averages. unless the stock can break out, brodin thinks there's nothing stopping it from going a lot lower. she sees 20 points of downside here, with it possibly dropping even further down to $51. 31-point decline for the best -- maybe one of the best independent oil and gas companies in the world.
now check out the best major growth oil. this is occidental petroleum. at $79, they are already 30 points off its 52 week high. hey, listen, i got to start buying somewhere. no! brodin thinks it could fall another 24 points at least, and then possibly go as low as 41. that would be a massive 48% decline! doesn't matter that this company has some of the best oil shale holdings on earth in california. doesn't matter that this is a really valuable company. it's the same chart as the others. it's not just the oil patch. don't get too complacent. take a gander at another company i like so much. this is joy global. no joy in global. this is the mining machinery maker that gets the lion's share of its sales from coal. joy has fallen off a cliff. already down a cool 40 points from its 52-week high.
brodin believes joy could fall another $11 to $14 from here. it did go much lower during the 2008 period. speaking of 2008, there's freeport mcmoran, the huge miner of copper and gold. just like all the other commodity-related charts, freeport has been making lower highs and lower lows. the stock is well beneath its 50-day and 200-day moving averages. even though it's already fallen a staggering percentage, brodin thinks it has a ways to keep falling. it might not stop until it hits 21 or 23. not even the yield can save it. remember this one bottomed at 17 when it got rid of the dividend. i just don't think things are that bad. but remember, this is not my view. i'm showing you a chartist because the people who trade
these stocks are really working right off the charts. of course brodin would change her mind on any of these stocks if they were to rebound dramatically from these levels. that's always a possibility if china slashes interest rates or if greece got its act together, because it's certainly not because of u.s. industrial production, which is very strong. for now, the charts say these commodity names are headed a lot lower and that's a pretty darn good reason to stay the heck away, even though i think there's tremendous value. i can't tell you to buy these stocks now. here's the bottom line. this is not the time to try bottom fishing in the commodity names. schlumberger, occidental, apache, joy global, freeport, they have a lot further to fall. my view, i say why bother with these commodity plays at all when the charts and the underlying commodity prices are against you? there are so many other easier non-battleground ways to make money, even in this difficult market, especially the companies that buy the raw commodities from these companies to make their products.
the commodity plays, they're a slaughterhouse. and slaughterhouses stink. after the break, i'll try to save you even more money. coming up, social studies. the facebook notifications keep rolling in. but don't get overwhelmed. cramer's got you covered. with this giant-sized social offering still expanding, jim stacks up the shares against the rest of its social circle. could his comments help you change your status? [ male announcer ] research suggests the health of our cells plays a key role throughout our entire lives. ♪ one a day men's 50+ is a complete multi-vitamin designed for men's health concerns as we age. ♪ it has more of seven antioxidants to support cell health. that's one a day men's 50+ healthy advantage.
everybody is talking about facebook, which is expected to come public with a bang on friday. we don't just talk about ipos. we tell you what to do about ipos. we try to tell you where they should be priced, where they should be bought, and often the most important, where they should be sold. for weeks, i've been telling you if you can get in on the facebook deal, you should try to get as many shares as possible, something that i reiterated again on monday. >> buy, buy, buy! >> but if you can't get in on the actual ipo, like i told you last night, you absolutely must not, not buy facebook in the aftermarket, especially not during its first day of trading on friday. this is so important that i'm repeating it again tonight. buying on the first day is almost always a boneheaded move. >> the house of pain! >> and it's been a mistake with every single -- every single social media ipo we've seen so far. if you put a market order in to
buy facebook at the opening, shame on you. you deserve your own fate. but with all the hoopla over facebook, maybe it's time for a reality check. is the recent wave of social media ipos merely a repeat of the hideous, horrible, money losing dot-com bubble? are we making the same mistakes all over again? is the tremendous amount of excitement over facebook simply irrational exuberance? i've told you not to buy the stock on friday after it come public, but maybe you shouldn't buy it at all. no, no, no, and no. when you look at the facts, the bubble talk seems foolish. facebook isn't the epitome of a dotcom era mindset that lost people fortunes. it's a tremendous company that made people tremendous growth. eyeballs, the old stupid metric that got people in so much trouble the last time around. you could analyze the stock by the numbers. you don't have to be an ophthalmologist to count how real the eyeballs are. facebook could be a great investment if you get it at the right price.
that's core valuation analysis. it's more important than the huge number of shares that everyone's yapping about, or the fact that there are a ton of insider sellers. of course, yeah, sure, i'd like to see no expansion or insider stock, but come on, at that point, that's a distraction. why am i so confident the anti-facebook bubble heads will be wrong? first of all, people might be excited about all the latest social media ipos, but what's happening now is nothing like the insanity that gripped the market in 1999. unlike a lot of the scolds out there, i can actually remember the dot-com era, i lived through it like almost no one else. i was running my hedge fund. i also founded an internet company that came public back then. i watched it strike on the first day and spend years crashing and burning before it bottomed at a dollar. yes. stocks can't go below zero. so i'm more qualified than just about anybody else in this
country to make this judgment. facebook is a legitimate company. in fact, it's too legit to quit. in 1999, we had 289 internet related ipos, and that's an order of magnitude bigger than what we're seeing now. that is a mania. in 1999, the internet related deals accounted for 60% of all ipos and the average spiked 90% on its first day. that is a mania. those numbers are both way bigger than what's happening now. just as important in the original dot-com bubble, there were actually a handful of companies that went on to thrive, like amazon. if there's any truth at all to the comparisons, i'm betting that facebook is going to turn out to be one of the few survivors. just consider, facebook is in a league of its own compared to every single other social media play we've seen, and that's why
it's expected market cap will dwarf all the rest. i'm not daunted by $100 billion market capitalization like so many people are. in the last quarter, facebook generated over a billion in revenues. you know how hard that is to do? not only is facebook profitable, earning 43 cents a share, but i can see the expectations of making two bucks in 2015 are realistic. if they execute right, could be more like $4, and these guys are cracker jack executioners. of the other social media plays, pandor and yelp weren't profitable. facebook has 901 monthly active users, that leaves everybody else in the dust. facebook makes more money per user, 1.21. only linkedin comes closer. facebook has higher barriers to entry than any business, well frankly anybody else in this business. it's a higher barrier entry than google.
google plus hasn't been able to chip away at their dominance. you simply can't replicate the wonder and reach of facebook. replication being the key term here. no matter how much money you have, you can't replicate it, which is why the $100 billion valuation does not freak me out. i am not one of these. it is the ability to target advertisements in a way that no one else can. mobile is the big risk here. admittedly, i've said that night after night. facebook has only just started to roll out its mobile advertising strategy, but they have a better chance of winning in this area than any of the other social media names. if anyone can devise the strategy, it will be zuckerberg and company. disney's bob iger told us that if an advertiser wants his brand out there in a big way, nothing can touch the reach of broadcast tv. but companies tell me that facebook has been a major driver of business for them. i don't think they're making it up. plus, when facebook comes public on friday, it won't even be the most expensive social media stock. there's no telling where it will be once it starts trading, but
at the mid point, facebook will be trading at 55 times next year's earnings. linkedin, the most successful social media ipo to date, trades at 90 times next year's earnings and 38 times 2015 estimates, wildly more expensive than facebook. even if facebook doubles on its first day of trading, it would still be cheaper than linkedin. even loser yelp trades at 33 times 2015 estimates and facebook should definitely be worth more than yelp. yes, i think facebook could be a worthwhile investment. but only if you can get it at the right price. price is what matters and that means being patient, waiting for the initial fervor to subside, and only buying it after it begins a pull back down somewhere along the road. what separates the winners like linkedin from the losers like just about everybody else, but especially groupon and pandora? linkedin has been able to turn a profit. in the latest quarter, it was excellent. linkedin is basically facebook for professionals where people looking for jobs can network with each other. management has also been
conservative. it's a chronic underpromise, overdeliver, which has allowed the company to beat the numbers. i think it's a good sign that the one social media play is the one that looks and acts just like facebook. don't forget, though, even with linkedin, a much better chance to buy on the first day of trading. buying the pullback was much smarter than buying the pop. groupon and pandora have been the worst performers since coming public. both groupon and pandora have got the same problem. there's nothing proprietary about them. groupon's local deal model has been replicated by everybody. pandora, online radio station, which to me doesn't seem that much different from a normal radio station or spotify. neither of these companies has been focused on profitability. facebook has much more in common with linkedin than it does with groupon or pandora. they're making real money. they have an incredible
proprietary platform. and the company is run by a brilliant visionary ceo. the earnings here are real. they are not chimerical. here is the bottom line. the facebook ipo is not a sign that we're repeating the mistakes of the dot-com bubble, even though everybody seems to say it. facebook is a fabulous company, much better than any other social media ipo we've seen so far. i think the stock will succeed, like linkedin. not flunk like groupon or pandora. however, that doesn't mean you should buy it when it starts trading on friday unless you're in on the deal. if you don't get on the deal, recent history says patience, as painful as that might be -- >> the house of pain! >> will be rewarded. wait for the enthusiasm to subside. i'm willing to bet that the market will indeed give you a better price. doug in new york. doug? >> caller: hey, jimmy, how you doing? >> real good, doug. how about you? >> caller: getting a little bit rocked by this market. but i'm taking your advice. 5% to 8% dip opportunities, increasing my position in google last week. helped me out, baby. >> and that google is good. google is regarded as being a high-class facebook, even though i think they're both good companies.
how can i help? >> caller: here's my thoughts. i'll get your thoughts. what do you think about google losing some of its ad dollars with facebook, and if there's any potential threatening with the new search engine rewrite? what do you think? >> i'm looking at google and facebook like abc and cbs, or nbc and fox. i think there's room for advertisers. there's plenty -- unfortunately, there's a lot of copy, a lot of -- there's a huge amount of volume of pages on the web. but google and facebook are considered to be high quality places to advertise, so there will always be advertisers for both. joyce in texas. joyce? hey, joyce. >> caller: hi, jim. i'm so glad you were able to take my call today. my question is on american tower systems, i have owned this stock in the past, but i'm sold out of it. and it went down today, 56.82. i was wondering if you think i should get back into it. >> let's wait a little. the previous caller, we were talking to doug about the notion
of the 5-8% pullback. you don't have that back. american towers is a point or two after its high. i like that company. they are the real deal. they're the antenna company. facebook is one of a kind. at these levels, it's not an expensive stock compared to its peers. if you can get in the ipo, great. if not, we'll talk about it. stay with cramer.
it is time! it's time for the lightning round. are you ready, skee-daddy? time for the lightning round. let's go to jack in tennessee. jack? >> caller: jim, boo-yah, from nashville. >> oh, man! sing to me. >> caller: vhc -- >> the greatest speculative stock of all time, or at least since our show began, number one performer keeps winning a lot of battles. i am going to say that even though it's a lawsuit patent name, it can go higher. trades very erratically. rich in south dakota. rich? >> caller: hey, jim. this is rich, transplant from long island, new york, living the dream in south dakota. >> you are living the dream, my
friend. you are living it. what's up? >> caller: i bought some devon energy a couple times this week because i'm not afraid, i'm buying. but my question is about superior energy. spn. it was mentioned on your show a few times in the past and i wanted to see what you thought about it now. >> right now it's in the dog house. it's down big for the year. i am avoiding commodity stocks for now. there will come to be a better moment. let's go to lillian in new york. >> caller: hi, jim. this is lillian with a big boo-yah to you from nassau county, long island. jim, a while back, you spoke about dolby labs, dob. i bought some for myself and my grandchildren. nothing happened, no movement. i kept it. about a week ago, there's breaking news, and said that dolby had bought the naming rights to the kodak building.
the market was down but it was up $6 a share. what's your take on this stock? >> i think it's time to ring the register. the original thesis worked out because when homes were booming, it was about home theaters and sound and new movie theaters. now i think it's played out. i want you to take the money and run. danielle in nevada. danielle. >> caller: hi, how you doing? >> real good, danielle, how about you? >> caller: i love your show. i'm doing good. and you help a little investor like me. >> that's what i want to do. >> caller: i'm doing mgm resorts international and ticker is mgm. >> inexpensive stock. vegas has been down on its luck. we know that from wynn. i'd rather have you stick with las vegas sands, lvs. billy in texas? >> caller: boo-yah, brother jim. >> what's shaking? >> caller: this is brother billy bradbury from texas, and i'm calling to honor my father bill senior, who was a huge fan of
yours. whose last wish was to lease our 200-acres of barnett shale in parker county. >> he's a successful man. i'm sure he led a long and happy life and he's got a good boy. what's up? >> caller: the texaco stock he earned as an executive with quaker oats company. i wanted to know if this would be a good time to sell. >> he had horse sense. i don't want you to sell. i think there's a big turn going on. i'm not concerned about these ideas of breaking up. it is synergistic to have both on. i am telling you to hold on to that, sir. i think you can see higher prices now that commodities are coming down. wanda in minnesota. wanda? >> caller: hey, jim, how are you? >> i didn't buy the vikings. i had my chance. i didn't do it. what's up? >> caller: well, we finally got the new stadium. >> they would have thrown the stadium in too for me. i bet wrong that way. what's up? >> caller: i got a dilemma i hope you can help me with.
i originally invested in a nontraded reit. it's now gone public, mid april, they call themselves retail properties of america. rtai. they went public, did a stock split. >> yeah, you know what? we're federal realty believers here. we're frt. we're going to say no to that one and yes to federal realty if you want that exposure. and that, ladies and gentlemen is the conclusion of the lightning round! >> the lightning round is sponsored by td ameritrade. ♪ so every year my family throws this great reunion in austin. but this year, i can only afford one trip and i've always wanted to learn how to surf. austin's great -- just not for surfing. so i checked out hotwire. and by booking with them, i saved enough to swing both trips. see, hotwire checks the competition's rates every day so they can guarantee their low prices. that's how i got a 4-star hotel on the beach in san diego
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focus on the positive here at "mad money." my end goal is to help you home gamers make money, no matter what the market is doing. ten out of 12 days, the dow is down, we still got to do it right. there's still plenty of money making opportunities out there, and when picking your stocks, i always like to say diversification is key to staying in the game. that's why we play every wednesday, am i diversified. call or tweet me @jimcramer. i tell you if your portfolio is diversified enough, or maybe you need to mix it up a little. let's start off with a tweet. am i diversified? apple, intel, pfizer, at&t, and waste management. he is from madison, new jersey, which is our chief rival from summit, other than chatham. quality drug company in pfizer. we've got a tech company with a 3% yield in intel.
waste management, another high yielder. at&t, which is a great yielding telephone stock. and we have apple. is apple a conflict with intel? yes. so we're going to get rid of intel. we've got to take that out, as much as we like intel, and what we're going to do is add an industrial. why don't we do dupont? let's go to bob in kansas. bob? >> caller: hey, jim. keep up the good work. i watch your show religiously. >> you're a good man. this is some day, some market. but let's make sense of it. >> caller: my five stocks are wft, intc, adm, archer daniels midland, dg, dollar general, t, at&t. >> all right. for a second there, it's like playing with david faber "jeopardy." david will get it right because he's the brain. weatherford, they lost control of their accounting.
at&t, high yielding, terrific company. dollar general, that is the cohort that everybody respects right now. intel, tossed it out last time, but i don't see a conflict this time. good yielding tech. adm, which is an ag play. ag really soft today. they shot themselves in the foot, as they said they would. telco, ag, retail, tech, oil. bingo! now we're going to adam in minnesota, where i almost bought the vikings. adam? >> caller: hey, jim, how are you? i think the market is kind of taking its cue from our twins here. >> you're right. yeah. or the vikings. well, whatever. but must be tough to be from there right now. go ahead. i met the twins a couple years ago, they're great guys. >> wondering if my top five stocks are diversified or if i'm better off betting on the twins. american tower, meli, nike, nke,
waste management, wm, and statoil, sto. >> i like this because i see people are getting the yield equation. they're trying to protect themselves with the yield. which you know i think is terrific. let's see what this twin fellow has. statoil, not a lot of growth, but it's got good yield. nike, fabulous growth stock. american tower, reit, we all know that you need antennas. waste management, high yielding industrial. we got a telco. we got a retailer. well-played. everyone, congratulations. "mad money" back after the break. sfx: sounds of marching band and crowd cheering sfx: sounds of marching band and crowd cheering so, i'm walking down the street, sfx: sounds of marching band and crowd cheering just you know walking, sfx: sounds of marching band and crowd cheering and i found myself in the middle of this parade honoring america's troops. which is actually quite fitting because geico has been serving the military for over 75 years. aawh no, look, i know this is about the troops and not about me.
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i'm still reeling from that hideous loss jc penney announced last night. it was a total, unmitigated disaster. this travesty could have been predicted because ron johnson, the new ceo, overpromised and underdelivered big-time. in fact, i did predict it. johnson encouraged people to think the term would be pretty smooth. he came out with guns blazing. now the guns are blazing, all right, but at him. you know what i didn't like? let me count the ways. we know the boasting about pure hubris that allowed him to sell shares for $41 a share three days after he hyped it to the moon. how is he doing versus everybody else? where did that go? sure, he did it to pay for his taxes but you can pay for taxes a lot of different ways. he cut his holdings almost in half, right at the high. nice call, ron!
he gave himself a great price. he won. shareholders, remember them? they lost. but the most nauseating thing about the penney's conference call was the fact that the hubris continues. there was no real humility about the dividend elimination, something older investors most definitely counted on. there was more touting of the changes johnson is putting through, none of which look like they're working. he also said this is not a throwaway year. "we expect to earn money this year, good money." where the heck did he get that? how about this one? when johnson said -- sorry. but it's so out of control. you got to wonder what's wrong with the guy. he said the turn is 29% complete. huh? like making up a specific sounding faux-precise number somehow adds credibility rather than subtracting from it, especially given how wrong he's been? to me, johnson is both alienating the old customers and not bringing in the new ones. they're going to macy's and
target and just about anywhere else. i visited jc penney and i was appalled at the merchandise. that was obvious to everyone, everyone except johnson, who is only now discovering that old inventory is not his friend. it is embarrassing. i don't think the brand changes are being executed in a way that works, and 18.9% decline in same store sales can't be turned around any time soon. sears, which we all know hasn't been able to turn anything around, never had these kind of hideous numbers, and sears, which here's the old catalog, has a much better balance sheet. if johnson has simply said nothing, if he hasn't slagged the competition, if he kept expectations low, if he talked about how his everyday low pricing strategy would be rolled out ever so slowly to wean them off coupons over time, not cold turkey, then maybe i'd feel better. it's only worked for one person, johnson. it makes me wonder if johnson had as much to do with the apple stores as i thought when he came
over from that terrific company. if i didn't know any better, i think that johnson might have simply been along for the steve jobs ride. i know, 90 days. real early. but his acknowledgement that his first quarter performance was, and i quote, "a little tougher than expected." it's the retail understatement of the year. if i were johnson, a simple apology, an acknowledgement of how sorry and humbled he is, would have been a much better way to go. stay with cramer. when you're training to be the best, you gotta eat the best. you've gotta try the new smokehouse bbq chicken. it's smokin'! [ male announcer ] new from subway. tender, slow-cooked chicken marinated in a sweet n' smoky barbecue sauce. merely 6 grams of fat. better for you and irresistible, too. can't beat that. [ male announcer ] the new subway smokehouse bbq chicken. hurry in. i never get tired of it! -delicious! -total knockout. subway. the official training restaurant of carl edwards... mike lee... blake griffin and athletes everywhere.